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Adobe warns on sales
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July 30, 2001: 12:44 p.m. ET
Graphics software maker says slowdown hurt revenue more than expected
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NEW YORK (CNNfn) - Graphic-design software specialist Adobe Systems Inc. said Monday it expects to hit its third-quarter profit target but warned that revenue for the quarter will be less than expected as sales continue to be hurt by global economic weakness.
Shares of Adobe (ADBE: down $2.07 to $40.99, Research, Estimates), whose best-known products include Photoshop, Illustrator and Acrobat, fell more than 4.6 percent on Nasdaq following the announcement, which it made before the U.S. markets opened.
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 Bruce Chizen, CEO of Adobe, chats with CNNfn about third-quarter revenue. |
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Analysts polled by earnings tracker First Call generally are expecting the San Jose, Calif.-based company to log an operating profit of 28 cents per share for its fiscal third-quarter ending Aug. 31. That's a penny less than the company earned during the same period last year.
While they said they expect to meet those expectations, Adobe executives said weaker-than-expected economic conditions could weigh on its top line for the quarter, causing the company's revenue to decline from the $328.9 million it reported a year earlier.
In June, the company forecast third-quarter revenue would be flat.
"Despite the global economic conditions and its potential effect on our [third-quarter] revenue, Adobe is on track to meet its bottom line target for the quarter," CEO Bruce R. Chizen said.
Adobe, which is expected to report earnings Sept. 13, said that, after a "solid" June, U.S. revenue was weaker than expected in July. In Asia, the company said it had been expecting a slowdown in the third quarter, but sales in Japan during July were even weaker than it had expected.
The company said sales in Europe, which began slowing in April, stabilized during the first two months of the quarter.
In June, Adobe reported fiscal second-quarter net income that fell to $61.3 million, or 25 cents per share, from $65.8 million, or 26 cents per share, a year earlier. Second quarter revenue rose 15 percent to $344.1 million.
At that time, executives revealed a survey that showed more U.S. businesses were putting off software purchases due to the softer economy, and that in general Adobe's U.S. sales were weaker than expected in May.
The company's products are used largely in traditional print publishing, and Adobe in recent years has been stepping up its efforts to expand its business onto the Internet.
Using the now familiar portable document format, or PDF, Adobe's Acrobat has become a standard for Internet publishing of items such as tax forms and other documents that can be read on a computer, attached as e-mail, and printed without losing any of their original formatting along the way. 
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Adobe
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